Three CT Hospitals Get Greenlight To Go For-Profit 

By Rosana Garcia

Letter-H-blue-iconConnecticut now has three more for-profit hospitals, joining Sharon Hospital, for a total of four for-profit hospitals in the state.

Waterbury, Rockville, Manchester Hospitals now for-profit

Greater Waterbury Health Network, which includes Waterbury Hospital, joins Eastern Connecticut Health Network (which includes Rockville General and Manchester Memorial Hospitals) as Prospect Medical Holdings’ companies.  Prospect Medical Holdings is a California-based for-profit health care corporation.

The final decisions for Waterbury Hospital were released on Friday, July 15, from the Office of Health Care Access (OHCA decision here) and the Attorney General’s Office (see decision here).  The final decision in the Manchester and Rockville Hospitals deal was issued by the state in early June.

The Office of Health Care Access (OHCA) oversees the state’s Certificate of Need (CON) process.  The Attorney General’s office oversees the handling of charitable assets as the hospital changes from non-profit to for-profit status.

Both decisions from OHCA, for the Greater Waterbury Health Network (GWHN) and Eastern Connecticut Health Network (ECHN), are very similar.  GWHN Final Decision here, ECHN Final Decision here.  

It is disappointing that other solutions couldn’t be found for both of these networks, and that we now have three more for-profit hospitals in the state.  Before, we only had one, Sharon Hospital, in the northwest corner of the state.  It is going to take a watchful eye to ensure that communities, and patients, will continue to have access to quality, affordable health care.

Here’s some of the good and not-so-great requirements, from the consumer, patient and community perspective:

The Good

OHCA has certainly put some conditions in place that make it a little easier to watch how these hospitals and health networks operate after the final closing of the sale.  There are also conditions that punch up community engagement and accountability.

OHCA is requiring Community Health Needs Assessment-look alikes in all three communities of Waterbury, Manchester, and Vernon (Rockville).  For-profit hospitals are not required to conduct Community Health Needs Assessments (CHNAs).  CHNAs are a requirement for non-profit hospitals to keep their tax-exempt status with the IRS.

OHCA has chosen to require a Community Health Needs Study, with an accompanying Implementation Plan, that will be done in all three communities in three years, as all three already have 2016 CHNA’s that PMH is also required to follow.

Unfortunately, PMH will be able to choose the frequency of the CHNA after the 2019 due date.

Community representation on the board is another OHCA requirement, with that person retaining voting rights, as well.  This community representative on the local board will be selected by the Mayor of the respective towns.  This is a better alternative than PMH choosing the community member, preventing the possibility of the corporation selecting a “yes-man” that will rubber stamp local board decisions, and not truly speak for the community.

Again, it is yet to be seen who this person will be, and if they will truly serve the community’s interests on the board, including all members of the hospitals’ service area.

Some other positive conditions:

  • An independent monitor will watch PMH’s compliance with the conditions put in place by OHCA for two years – and that can be extended for one more year if OHCA chooses
  • PMH has to submit plans for providing health care services for the three years following the deal
  • PMH has to submit how the capital investment commitments – money to be spent on improving the hospitals – are being implemented, until the commitment dollars are all spent
  • PMH will need to report to OHCA the cost savings they have achieved at all three hospitals
  • Community benefit and community-building activities need to remain at the same levels as before the acquisitions by PMH

The Not-So-Great

Again, it is worrisome that these three hospitals are now for-profit.  With profits as their new bottom lines, it remains to be seen how pricing and services will change in the future.  Will prices go up?  Will services that lose money be shut down?  Will people still be able to get the care they need, when they need it, at a price they can afford?

OHCA has limited their oversight of the three hospitals (and the two larger health systems) to three years.  While this doesn’t mean that OHCA or anyone else could not watch how these hospitals and health systems operate, it may become harder and harder to extract information from PMH without a strict order in place.

It will be important to watch how these three hospitals and two health systems provide quality, affordable care to their communities.

Our Previous Blogs on Prospect Medical Holdings’ Deals

Important Victory in Sale of Manchester & Rockville Hospitals (6/16/2016)

Hearing on Waterbury Hospital’s Proposed Sale to Prospect (5/5/2016)

Waterbury Hospital Must Remain Accountable to its Community (4/26/2016)

Community concerns over potential Manchester, Rockville Hospital sales (4/5/2016)

Manchester & Rockville Hospital Sales Up for Review (3/21/2016)

Diving Deeper

CT regulators give final OK to sale of Manchester, Rockville hospitals (CT Mirror, 6/10/2016)

OHCA’s Final Decision in the Eastern Connecticut Health Network Deal

OHCA’s Final Decision in the Greater Waterbury Health Network Deal

Hospital conversions at the Office of the Attorney General’s website

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